Pevy Corporation has two divisions: Southern Division and Northern Division.The following data are for the most recent operating period: The common fixed expenses have been allocated to the divisions on the basis of sales. What is the company's overall net operating income if it operates at the break-even points for its two divisions?
A)($36,520)
B)$33,080
C)$0
D)($206,520)

Question

Pevy Corporation has two divisions: Southern Division and Northern Division.The following data are for the most recent operating period:  The common fixed expenses have been allocated to the divisions on the basis of sales. What is the company's overall net operating income if it operates at the break-even points for its two divisions?
A)($36,520) 
B)$33,080 
C)$0 
D)($206,520)

Quizplus · Accepted Answer

If the company operates at the break-even points for its two divisions,it will not cover its common fixed expense of $36,520.

Pevy Corporation Has Two Divisions: Southern Division and Northern Division